Why The Supreme Court Needs To Make Sure That Selling A Used iPad Isn't A Copyright Violation

from the first-sale,-please dept

Over the last few years, we've been following a series of cases that have challenged the first sale doctrine -- which says that if you buy a product that has some element covered by copyright (i.e., a book) you're able to resell that item at a later date without seeking permission from the copyright holder(s). There was the very troubling ruling in the 9th Circuit in the Omega/Costco case, in which watchmaker Omega put a tiny little image on the underside of its watches -- for which it claimed copyright -- that were sold relatively cheaply outside of the US. When a bunch of those watches were purchased (legally) outside of the US, and then imported and sold by Costco (for less than what Omega was selling watches for directly in the US), the company sued... claiming copyright infringement on that tiny logo no one looks at.

Now, you might think that under the first sale doctrine, it wouldn't matter. But, the statute is inelegantly worded. It says that first sale applies to products made "under this" law. Omega argued that since the products were made outside the US, they weren't made under the US Copyright Act... and thus, were not subject to the Copyright Act or first sale when they showed up on US soil. The Supreme Court heard the case, but split down the middle, because Justice Kagan had filed an argument as Solicitor General in that case, and thus recused herself. Worryingly, as Solicitor General, she has argued that first sale does not apply to foreign goods.

Last year, we had another ruling, over in the 2nd Circuit, which in many ways was even worse. It involved a guy, Sudap Kirtsaeng, who had relatives in Asia purchase cheaper textbooks there and ship them to the US, where he then resold them at a profit (but still for less than what the publishers were charging in the US). Publisher John Wiley & Sons sued... and got a ridiculously broad ruling, saying that any product manufactured outside the US is not covered by the Copyright Act, and thus not eligible for first sale protection.

In fact, in many ways this ruling was even worse that the Omega ruling -- which at least said that if the manufacturer had authorized the product for sale in the US, then first sale rights would apply to all of those products, this ruling even said that this was not true. The court acknowledged that this was kind of a crazy situation, which could have ridiculous consequences (all manufacturing moves overseas immediately to get away from first sale doctrine), but says that's what the Copyright Act appears to say:

Kirtsaeng argues that this holding is undesirable as a matter of public policy because it may permit a plaintiff to vitiate the first sale doctrine by “manufactur[ing] all of its volumes overseas only to then ship them into the U.S. for domestic sales.” Defendant-Appellant’s Br. at 21. Phrased differently, it is argued that any such decision may allow a copyright holder to completely control the resale of its product in the United States by producing its goods abroad and then immediately importing them for initial distribution. In this sense, the copyright holder would arguably enjoy the proverbial “best of both worlds” because, in theory, the consumer could not rely on the first sale doctrine to re-sell the imported work. In other words, the copyright holder would have an incentive to“outsource” publication to foreign locations to circumvent the availability of the first sale doctrine as a defense for consumers wishing to re-sell their works in the domestic market. The result might be that American manufacturing would contract along with the protections of the first sale doctrine. Kirtsaeng argues that this could not possibly have been Congress’s intent. We acknowledge the force of this concern, but it does not affect or alter our interpretation of the Copyright Act.

Here are some things you might have recently done that will be rendered illegal if the Supreme Court upholds the lower court decision:

Sold your first-generation iPad on Craigslist to a willing buyer, even if you bought the iPad lawfully at the Apple Store.

Sold your dad's used Omega watch on eBay to buy him a fancier (used or new) Rolex at a local jewelry store.

Sold an "import CD" of your favorite band that was only released abroad but legally purchased there. Ditto for a copy of a French or Spanish novel not released in the U.S.

Sold your house to a willing buyer, so long as you sell your house along with the fixtures manufactured in China, a chandelier made in Thailand or Paris, support beams produced in Canada that carry the imprint of a copyrighted logo, or a bricks or a marble countertop made in Italy with any copyrighted features or insignia.

Basically, if you sell anything that was made overseas that has anything covered by copyright on it... you might need to get permission to legally resell it. That's insane, and there's no way that was the intention of Congress in passing the law. The courts are supposed to avoid obviously nonsensical outcomes, but they don't always understand the consequences of their rulings. While the courts have (correctly) noted that Congress can fix and clarify the law later, Congress isn't very good at acting quickly on stuff like this and any time Congress even touches copyright law, it's something to worry about.

Ammori notes that there's actually a third case, over in the Third Circuit, Sebastian v. Consumer Contacts, in which the court "was reluctant to accept" the idea that first sale only applies to goods made in the US. So there's a pretty clear circuit split for the Supreme Court to work out. But, it's a little scary that it might come down in support of either the Omega or the John Wiley rulings -- and we already know that the Omega case had four of the justices in support of that absurd interpretation. Ammori points out that the Supreme Court has an opportunity to fix things and get it right this time around, and hopes that it will:

But the Supreme Court doesn't have to impose an absurd result on the nation. The first-sale doctrine reflects basic common sense -- and follows from the logic of treating copyrights and other "intellectual property" with no more protection than regular property. Ever since the end of Medieval feudalism, and the writings of John Locke, we have understood the importance of being able to buy and sell one's own property, including books and watches, both for reasons of economics and liberty.

The Court has several legal justifications for reaching the right result. Courts are supposed to interpret laws to avoid "absurd results" and to avoid constitutional problems -- such as infringing on the free speech rights of Americans that want to buy and sell their own books and creative works that are published abroad and taking away the property rights, without compensation, of the millions of Americans who buy and sell their own stuff every day, in person and online.

Ultimately the Court must choose between bringing copyright law into the Internet age or consigning us all to the dark ages. I hope they choose wisely.

I hope so too, though I have little faith on this one, considering that the Supreme Court always gets screwed up when it comes to copyright cases...

Why just not the First Sale Part

If they are manufactured overseas and are not covered by copyright (and hence the First Sale Doctrine) what copyright are they covered under that will prevent "printing my own" version of the textbooks (ignoring the watch issue).

Re: Why just not the First Sale Part

I had this question when I first read about the Omega ruling. "Why do you get to pick and choose what parts of copyright law you want to apply? No First sale; no Copyright!"

But I read up a bit and even though there's no "international copyright" there are various international agreements that complicate all of this to an extreme degree. If we don't honor theirs, they won't honor ours. There's lot's of folks who don't want to even think about that happening.http://www.copyright.gov/fls/fl100.html

Our objection also wouldn't apply to a work that was originally created in the US, and then taken overseas for duplication. The original would have Copyright, but the duplicates wouldn't be created "under this law" so first sale wouldn't apply. (I think)

Random Thought

Congress needs to hire some professional scumbag assholes--somebody who (unlike the normal Congressional scumbag assholes) isn't there to pretend to do good things. This person's job would be to read proposed laws and tell the normal Congress-persons how'd s/he'd use this law to screw people over and make a lot of money...

The idea being, if the Professional Congressional Scumbag Asshole(s) couldn't find a way to use the law the screw anybody; then it's a passable law.

Likely we'd want to recruit able-minded con-persons from prison as we'd want to get those who are provably talented. And, we'll like need more than one so they can be played against each other--thus not having opportunity to con Congress.

Law QA

It is simple, really. Software guys have been doing this for ages - you have developers who develop software, and you've got a QA/validation/testing teams that poke holes in software and try to break it in every way possible.

This is what we need for legislation: a team of politicians drafting laws, and a team of scumbag lawyers trying to come up with various ways to break these laws. The number of exploitable holes in our legislation will be greatly reduced even before these laws are put into production.

The thing is, selling a used IPad in it's original market, by the original owner should not be an issue at all.

It's true that first sale does not apply to foreign goods, because the original sale didn't happen inside the US and thus us not subject to the restrictions or benefits that exist under those laws.

It makes perfect sense, otherwise things are one sided. Can you imagine companies bringing in non-UL compliant electrical products, and selling them as "used" without concern for American safety laws? Or perhaps someone importing "used" fully automatic assault weapons, claiming they are not subject to US law. Would that be fair?

Where you may run into a problem is a non-apple deal buying up a bunch of lightly used IPads and opening an "apple store" of his own. As they are not licensed dealers, what they could and could not say about their standing with the brand.

Same question

It seems we normal people are just too stupid to understand the law. The argument is that these products are produced outside of the US and thus not subject to US Copyright law, but it would appear that the resellers are accused of breaking US Copyright law which does not apply to the products in question.

So it would seem that international agreements come into play, which leaves the question of which country's copyright laws apply and do they have a right of first sale.

For some reason I just don't believe that you cannot resell your own property in most other countries, as they must have something similar to our right of first sale doctrine, and if they do, wouldn't that apply in the US.

Who needs politicians to kill American jobs and send them over seas? Our judges and court system are doing a good enough job as it is with absurd rulings like this, that encourage people to move overseas so their products count as foreign made goods.

Re:

an you imagine companies bringing in non-UL compliant electrical products, and selling them as "used" without concern for American safety laws? Or perhaps someone importing "used" fully automatic assault weapons, claiming they are not subject to US law. Would that be fair?
Maybe not - but none of that has anything to do with copyright law does it?

Re: Random Thought

Re: Re:

Richard, perhaps you can think past the end of one law and on to the next?

If you think that copyright law shouldn't apply, why should any of the other laws apply? After all, the assault weapon ban is a "US" thing. If you buy them in a country where they are legal, shouldn't you be able to resell them in the US without having to pay attention to US laws?

It seems that all the branches of government are falling over each other to see who can prove they are more inept.

PS. Can the folks over at websters please come up with a few more synonyms for the word dumb? Every time I have a conversation about copyright law I feel like I have to repeat the same words too often...

Re: Re: Why just not the First Sale Part

Do these rulings have implications for foreign websites distributing unauthorized copies of films or music? If the copy is manufactured abroad (on a server in another country)* then would they not be covered by US copyright? I appreciate that importing these copies into the US is likely to infringe, but the site itself would be OK?**

* And it could reasonably be shown that the copy was manufactured abroad and not on the downloader's computer (Cablevision, Zediva, DISH, etc.).

** I'm ignoring any bilateral or international copyright agreements to which the country where the server resides may be subject.

So following their logic in that the product, being manufactured outside of the US, is not covered by the first sale doctrine of copyright law, then why not copy the book and sell the copy? You are either subject to the law or not, so if copyright law doesn't affect product manufactured outside of the US then they should be able to copy those works as well.

Re: Re: Re:

Omega and Wiley were arguing that because US copyright law does not apply outside the US it follows that the first sale doctrine is voided.

It is they theat think that (in some sense) copyright law doesn't apply outside the US - not me.

My position is that yes, copyright law applies in some form worldwide and therefore any legally manufactured and purchased item can be resold in the US (provided it does not violate other laws such as gun control, probited substances, safety regulations etc).

Re: Law QA

So if First Sale doesn't apply to goods manufactured outside the US, doesn't that implicitly exclude those goods from all US Copyright law?

Either it is or it isn't subject to copyright law. If its not subject to local laws, let the plaintiffs try their cases in countries where they are covered, and quit wasting my money. "First Sale Copyright Plight? Extradite!"

Re: Re: Re: Re:

What's your problem, Richard? You should know this by now. Copyright trumps all! If we're going to just ignore copyright then let's just ignore all the laws! Let's all just go snort cocaine while aborting babies for unwed mothers as we listen to the latest musical offerings from Justin Beiber ala the counterfeit cd you purchased from the vendor on the street corner on the non-compliant radio manufactured in Singapore while looking lovingly at your Russian imported Kalishnakov! Is that what you want?! Is it?!

Re: Re: Re: Re:

US copyright law does not apply on the products made outside of the US - but copyright still applies in general.

That is to say that, even if you buy the product in a location that has absolutely no copyright laws, when you import it into the US, you are at that moment subject to US copyright laws.

Since the purchase didn't happen under US law, the first sale doctrine does not apply to it.

However, by importing it into the US, you are subject to US copyright laws which apply to the product directly. First sale doesn't apply (no first sale in the US) but the copyright itself is still valid.

You cannot strike down the copyright on something by buying it outside of the US and bringing it in.

Re: Re: Random Thought

That's the problem. The money is found in getting the loopholes into laws, so someone can exploit it. So even if there are government paid watchdog lawyers, they'll likely only catch the most egregious loopholes. And even if they find them, the elected politicians would still be the ones "fixing" and passing the laws - unless you plan on major structural changes to Article One of the Constitution, or violently overthrowing the government and writing a new one.

remove the logo?

So, if it is simply because of a miniscule logo engraved on the bottom of the watch that is the object of copyright, can I not simply scratch, etch, acid wash, or otherwise obscure the logo as to make it unrecognizable? No logo = no infringement = sell the watches at Costco.

Obviously such a solution has no bearing on the Big Picture problems associated with this obviously wrong-headed reading of the law (aside from my ability to also etch logos off iPads, cell phones, etc.) but there is a (twisted and tortured) thread of logic to the ruling that would imply "remove the logo, remove the copyright violation." Even if the copyright act says you can't do that, these watches were not legally made under the copyright act, so...

Re: Re: Re: Re: Re: Re: Re:

Re: remove the logo?

Modifying them to attempt to avoid copyright would in itself be an issue, as the product would not be "as purchased", but rather would be modified. It would require manual handling of the products, which would then be "open box" rather than closed "as new", and the amount of work require and costs involved would make grey market importing pretty much a losing concept.

It still wouldn't void the copyright either, as it would show intent to defraud.

What about cars?

A few years ago I bought a used Audi from someone. This vehicle was built in Neckarsulm, Germany and imported into the US. It has software in the computer, the copyright of which belongs to Audi in Germany.

Question: Can I have the seller arrested for copyright violation, get my money back, and keep the car? It's really nice...

Re: Re: Re: Re: Re:

However, by importing it into the US, you are subject to US copyright laws which apply to the product directly. First sale doesn't apply (no first sale in the US) but the copyright itself is still valid.

Of course first sale applies. I am sure that the people who wrote the law did not intend the wacky argument that you repeat to become a consequence of the wording.

The law applies to goods "lawfully made under this title".

Now I would argue the the intention here was only to exclude books printed in places that had no copyright law and which had not been authorised by the copyright holder. The clear intention of the phrase "under this title" is that the first sale doctrine should apply to any article which would have been legal under US copyright law had the manufacturing process taken place in the US and only to exclude items that were not authorised by the copyright holder. (eg items made in countries with a shorter copyright term - so that - for example some sound recordings manufactured in Australia (term 50 years) cannot be legally re-sold in the US).

If the Omega/Wiley interpretation had been the intention then surely the form of words would have been different. If they meant "within the US" or "under US jurisdiction" then they would have said that - not "legally made under this title" which clearly makes no provision about where the item was actually made - for one very simple reason... You cannot necessarily tell by looking at an item where it has been made. It is a basic requirement of law that it should always be possible to tell whether you are breaking it or not!

Re: Re: Re: Re: Re: Re:

So what you are suggesting is that US law trumps the laws of other countries? So you feel that the legal action against Mega and other site operators from outside the US is entirely justified, because US law trumps everything else?

These kind of arguments could eventually come back to bite the manufacturers/publishers in the ass. All it would take is for a judge to make a ruling that if your product is not covered under the first sale doctrine because it was manufactured outside of the United States, it looses all other copyright protections (which seems logical to me--if you want one part of copyright law not to apply because you don't like it, then no part should).

Re:

Re:

Why would it be logical?

If a product is copyright, it is copyright period. The content is copyright regardless of anything else that occurs. You record a song, it's copyright. If you sell the rights in different countries, and people try to import from those other countries illegally (not licensed) to resell cheaper here, your copyright didn't magically disappear.

There isn't much logic at work here for you to argue that sort of thing.

Re: Re: Re: Why just not the First Sale Part

Unfortunately I don't have any legal training, so I can only provide speculation based on logical assumptions. (which doesn't align with legal reality in far too many cases)

I would say that yes, a copy created in a nation without any copyright restrictions of their own would be outside the jurisdiction of whatever US copyright existed on the original work. But much like fugitives hiding in non-extradition countries they would need to stay out of the network of copyright enforcing nations.

I think that this scheme is what had many SOPA supporters so riled up, despite the fact that there are no flying pirate servers over international waters (yet) and it's actually pretty hard to find a legal deadzone where the US has no international influence.

Re: Re: Re: Re:

When it comes to selling my iPad, I am the law. Period.

I don't give a shit about what legal issues there may be. If I want to sell my used iPad, I will, and if some asshole wants to try to come after me in court for it, they're welcome to. But it will be difficult for them to make a case while in a coma. Hopefully, they would have been smart enough to have made a living will. So any of you IP lawyers out there feeling froggy? Then leap.

Re: Re: remove the logo?

I'll give you the point that they probably wouldn't be able to sell them as new merchandise any more and that opening (maybe disassembling) each watch would be prohibitive. But "intent to defraud" from Omega would be a ridiculous claim and if the copyrighted "work" is no longer present there's no way the copyright remains.

Remember, this IP isn't on the watch as a whole, it's on a tiny picture included with the watch. Like if I removed a copyrighted picture from a frame, the copyright hasn't suddenly multiplied to cover two items.

There may be an issue communicating what the consumer is getting, if they believe they are buying one product and receiving an altered version instead. That's no longer a copyright issue but under auspices of consumer protection; and Omega may have trademark complaints with importers selling modified goods under their brand, but not copyright claims.

Re: Re: remove the logo?

I understand the issue of "open box" vs. "new," but I fail to see how this is intent to defraud. If it was advertised/sold as an imported Omega watch with the engraving removed, that is exactly what you would be getting. I don't see fraud. Also, Omega Seamaster watches were retailing for $1,995. Costco was selling them for $1,299. Even if it cost an extra $50 per watch to have someone scratch off the logo, there's still plenty of room left for profit.

Re: Re: Law QA

Re: Re: Re: Re: Re: Re: Re: Re: Re:

"Okay, so why should first sale apply to a sale that occurred outside of the US?"

The same reason it should apply to a sale that occurred inside the US. Why does the location matter? And really, THIS CASE should show you why, quite clearly.

If I want to buy a bunch of Omega watches in Canada - real ones, not stolen or prirated watches, but genuine watches bought straight from the Omega store - bring them to the US, and resell them for a profit, why should I NOT be able to do that? More specfically, can you provide a justification for why this should be legal unless Omega puts a tiny copyrighted image on the back of the watch, in which case it should be illegal?

Someone brought up the example of the imported car - do you think that someone should be unable to sell a car they've bought outside the US?

Re: Re: Re: Re: Re: Re:

Re: Exact wording, huh?

I like the way you think. This ruling could perhaps also be interpreted to mean that any satellite signals I "accidentally" intercept without paying for would not be covered by US property/IP law. Also, any technology blasted into space would automatically become public domain. Not to mention piracy in international waters (real piracy, mind you, not this copyright BS) would now be OK because all of my stuff, having left its country of origin, no longer belongs to me anyway.

Re: Re: Re: Re: Why just not the First Sale Part

Thanks -- appreciate the response. I should probably have been clearer in the case I was trying to construct.

Imagine a site that is obviously a bad actor (such that a US court is likely to rule it infringes copyright if it were domestic) and is owned by a US company, but whose servers are overseas. (For the last two points I'm obviously inverting the MegaUpload situation.) Also assume that, through some possibly Rube Goldbergian arrangement, a judge could be convinced that the "infringing" copies were made on the site's servers abroad.

Could the company (clearly in US jurisdiction) face prosecution, given that the copies are apparently not covered by the Copyright Act?

Only in the US

I think you may be arguing about something that is already in effect in many countries. For example, in Canada, importing a copyrighted work for the purpose of resale or distribution without a licence is explicitly a copyright infringement. This is how DVD regions and international book publishing licenses work. So one publisher has a license to print and sell a book in the UK, another has a license for Canada. To maintain the system, it is illegal for a person (or UK publisher's subsidiary) to purchase these books in the UK and to resell them in Canada.

You know, the other day I was shopping Amazon for a book for my Kindle. I knew just what book I wanted, and I found it on the UK Amazon website -- but not on the US Amazon website. Because I have a US Kindle, I can't buy ebooks from Amazon UK; because of the system of licensing regional distribution rights, I can't buy the ebook from Amazon US. I wound up finding a pirated copy of the book, downloading it, and manually transferring it to the Kindle.

The system, as it currently works, is crap. Pure and total crap. And the funny thing about all these lawsuits -- yes, they are all targeted at people who buy goods cheaply in foreign countries and then resell them in their own country. But the only reason this behavior is profitable is because the distributors are artificially manipulating their prices. If prices were actually set by the market, it simply wouldn't be cost-effective to, say, purchase books in Asia, ship them to the US, and resell them. The only reason someone like Kirtsaeng could make a profit was because the distributors had deliberately and intentionally raised their prices in the US by an insane amount.

I think that, in the midst of all the arguments about whether local IP laws apply to international products, we should take some time out to remember: with all the companies who are claiming damages, they could only be damaged because they've been price-fixing their products. I honestly don't give a damn about these companies' distribution rights or lost profits -- because their profits have been based on artificial monopolies, price fixing, and a fair bit of collusion. Screw them.

Have your cake and eat it too

It seems to me the SCOTUS has made a logical error. If the Copyright Act does not apply to goods manufactured outside the country, then I could take one of those goods and make copies and the putative copyright owner is not afforded protections. Or, if they are afforded protections then the first sale doctrine applies. You can't have both (protections but no first sale doctrine).

Re:

Yes, and if we let people sell cars secondhand, can you imagine companies bringing in non-compliant motor vehicles and selling them as "used" without any concern for American safety laws, and getting away with that because of the "first sale" doctrine?

After all, if you can sell your book you bought in Paris, surely nothing stands between the good people of the US and the mass, uncontrolled importation of unsafe electronic goods and nuclear and biological weapons.

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

The location matters greatly.

When I buy something in England, I expect British Law to prevail. That is to say, all of the British consumer protection laws, all of the standards and safety systems, and all of the like - the full power of the British legal structures to assure that the product I buy is legal and safe.

I don't expect the US government to get involved.

If I bring that product to the US, I expect US law to apply the moment I bring it into the country. Since the "first sale" didn't occur in the US, the first sale doctrine does not apply here. Copyright in general would still apply. The work I purchased from "distributor A" in England may not be licensed for sale in the US, or licensed only to "Distributor B". If I import a case of the product from England to sell in the US, I have violated their exclusive contract for sale of the product.

Basically, it violates rights that the copyright holder alone can assign to people.

As for the car, it's a whole different ball of wax here. First, you cannot import a brand new car into the US for resale from another country, there are laws against it. If you did so, you would have to modify it to be in compliance with US law, possibly having the car crash tested, emissions tested, and so on to get a type acceptance if the car isn't already sold in the US. Generally, it's pretty hard to import cars into the US for resale that are less than 25 years old.

Re:

But the prices ARE set by the market. Except that most industries fail to acknowledge that the internet transformed the world into a single market, especially for electronic goods. Instead, they use copyright to isolate national/regional markets and seek to find the profit maximizing price in each market individually. This way Microsoft can charge over $100 for Office in the West, but only a fraction in developing countries.

Re: Re: Re: Re: Re: Re:

AFAIK counterfeit goods are where somebody else than the original manufacturer produce a product and claim the said product as manufactured by the said original manufacturer, often at lower quality.

Consider counterfeiting a band's MP3. Say Band A record a song to MP3. As per above definition, someone wanting to counterfeit the MP3 then must hire another band, Band B, to record another MP3 "passable" as Band A's. The counterfeiter then incur production cost. If he want to sell at a margin, he then must somehow made the cost lower than Band A's cost, and that's not always easy, unless he has a talented slave labor, but even then he must consider equipment cost.

Given that economical predicament, not mentioning legal and societal, isn't it much safer that the counterfeiter just release his own original "digital" product? What's more, for digital product, there's a magic button labeled "copy" and viola, the original product is duplicated verbatim at minimal/no cost.

The question then became: "are we all counterfeiter every time we press that magic 'copy' button"?

An interesting sample case is the software dev paradigm, where for medium/large projects almost always employ VCS (Version Control System). The paradigm works by maintaining a central repository of resources pertaining to the project, then each developer "check-out" (read: copy) the files from the repository, work on them, then "check-in" (read: copy back) the edited files to it. If copying is counterfeiting, wouldn't each dev in this case counterfeit the work of other dev in the project?

Why is it OK to counterfeit digital goods to make a product but not OK to counterfeit the final product? Isn't the final product a digital goods also? hmmm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

> If I import a
> case of the
> product from
> England to
> sell in the
> US, I have
> violated
> their
> exclusive
> contract for
> sale of the
> product.

You can't violate a contract to which you are not even a party. A contract is an agreement between parties. When you buy something, you're not a party to the contract between the manufacturer and the retailer, so you can't violate it.

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

The work I purchased from "distributor A" in England may not be licensed for sale in the US, or licensed only to "Distributor B". If I import a case of the product from England to sell in the US, I have violated their exclusive contract for sale of the product.

Basically, it violates rights that the copyright holder alone can assign to people.

The only right that a copyright holder can assign is the right to make copies. (That is why it is called COPY RIGHT - the clue is in the name. It isn't called distributionright or resaleright) The distribution of said copies by third parties cannot be controlled by the copyright holder. At best they have a case against the person who made the copies, with whom they have a direct contract, on the basis of violation of that contract.

The clause in the law about "lawfully made under this title" is intended to prevent copies legally made in a country with shorter copyright term from being resold in the US and thus circumventing US copyright.

If congress had intended your interpretation they would have worded the clause differently. eg " made in a territory under US jurisdiction "

Re: Re:

The root cause of all this is that copyright varies from country to country. So saying that something has a copyright no matter what isn't always accurate. Take a look at this wikipedia page that explains how items can be public domain in Germany but copyrighted in the US, or vice versa:http://en.wikipedia.org/wiki/Wikipedia:Non-U.S._copyrights

Re: Re:

If I legally buy a 52-year-old record in Australia (where the copyright has expired), it is a legal (public domain) copy. If I bring that to the US as part of my property, that is legal too.

It appears that somehow the crux of this insane ruling is that if I try and sell this (legally bought) copy to someone in the US, it would somehow be miraculously 'infringing'. However, my friend who had bought the same record in the US could sell it perfectly well.
Except if it had been manufactured abroad...?

It's a global world. Learn to live in it!
Otherwise expect to see all kinds of cheap imports vanishing, and all kinds of cheap (normally home-made) stuff being imported. China will love you!

Re: Re:

Secondhand cars are already covered. You can buy a car overseas and use it in US ... AFTER it has been inspected and modifications needed to comply with US auto laws have been completed and certified.

You can resell a car you have imported into the US as you are the registered owner. If you have not already had the car certified for use in the US, then the buyer will need to have this done unless it will never be used on public roads or lands.

To use the car (except on private land) you need to register it. To register the car it must meet US safety standards. Foreign made vehicles often do NOT meet those standards and require modification before registration. This has nothing to do with First Sale though.

Re: Personally I hope they get it very very wrong

Why are we getting screwed?

Here's a question... why are these products being sold so much cheaper in other markets in the first place? Shouldn't currency conversion basically make the products the same price or are we just explicitly being screwed?